Yihua Enterprise (Group) Co Ltd, the bellwether of the country's listed timber companies that ventured overseas for forest resources, said it is going to aggressively expand its business in Africa with a $1 billion investment in Gabon, on the west coast of the continent.
The Guangdong-based company signed an agreement on the joint development of Gabon's timber industry with its government last month. The planned projects include an international timber trade center, more deep processing factories and a timber museum.
Based in Shantou, Guangdong province, Yihua has developed from a wooden furniture workshop into a conglomerate that covers a wide range of businesses from real estate to healthcare.
It has two listed companies, Yihua Life and Yihua Healthcare. Yihua Life, a leading furniture designer and manufacturer in China, bought a Gabonese timber company for its resources including 350,000 hectares of forests in 2012, in its first and the most important step so far to explore the African market.
Liu Zhuangchao, vice-chairman and general manager of Yihua Life, said that it was a win-win deal for Yihua to expand its business in Gabon. He revealed that Yihua has invited the prime minister of Gabon on a visit to China in June to discuss details for the deal.
"Gabon urgently wants to make good use of its timber resources to boost its economy. Our cooperation with the Gabonese government meets their demand, so we have their support to implement the agreement as soon as possible," Liu said.
"Yihua will continue to focus on Gabon for its African business, since the country has a relatively stable political situation," he added.
"We will invest $1 billion on the projects in the agreement and will add more as our cooperation expands."
Yihua has invested $150 million in Gabon since its purchase of the local timber company in 2012.
The Chinese company has built four timber processing factories in Gabon, two of which are for deep processing. The two deep-processing bases have hired more than 1,000 local workers and boast a total capacity of 400,000 cubic meters of timber annually.
Yihua said that to help with Gabon's industrial upgrade, it would add more investment to the two deep-processing factories, planning to increase annual capacity to 600,000 cubic meters.
Gabon's President Ali Bongo Ondimba visited China in December. During the talks with Bongo, President Xi Jinping said that China supported Gabon's efforts to speed up its industrialization and convert the country's resources advantages into value-added results.
Xi added that China encouraged domestic companies to take an active part in infrastructure projects in Gabon.
Besides the timber business, Yihua also plans to enter the real estate, elderly care and medical care sectors in Gabon, according to Liu.
Yihua also signed an agreement with the city government of Gabon's capital, Libreville, last month to establish a strategic partnership to develop the city's infrastructure, healthcare services and social housing sector.
As China vigorously promotes the Belt and Road Initiative, Yihua has been making greater strides for business expansion along the route in recent years, including Gabon.
Liu said Yihua Life is selling the furniture it makes in 35 countries and regions internationally under the Yihua brand. He said that in the UK, one in four lounge suites sold there is now made by his company.
Yihua Life bought HTL International, a Singaporean furniture manufacturer, for 1.83 billion yuan ($265 million) last year.
"The purchase is a big stride for a privately owned Chinese companies, but we will continue to increase global investment in the housing and lifestyle sectors," said Liu.
"The Chinese government encourages privately owned companies to venture overseas, especially to the economies along the Belt and Road," he added.